Costa Saroukos is the global chief financial officer (CFO) of Takeda. The Australian had a busy 2019, helping to oversee key aspects of the integration of Shire, and he spoke to BioPharmaDispatch during a recent visit to Sydney.
The US$62 billion acquisition of Shire, which was completed in January 2019, has helped transform the Japanese company. Its portfolio now has a significant range of therapies targeting rare disease while its clinical pipeline has 18 novel assets and new capabilities in gene-based and cell therapy.
“When bringing together two large organisations, the speed of integration is very important. You do not want it to impact operationally and cause distractions,” said Mr Saroukos.
“A key operational priority is bringing people together, making sure they know their roles. The integration has progressed more quickly than expected with 98 per cent of the new organisation confirmed by December last year.”
“Another important aspect is to get everyone working together on the same system. We have 20 IT cornerstone integration programs that have been prioritised and are well underway, progressing towards our two-year implementation target.
"We also continue to make progress on facilities, as we get closer to finalising the footprint of our commercial office locations, with 87 of decisions made. As a result of all of this, we will be capturing the synergies faster and improving our overall financial performance,” he said.
“Twelve months have passed since the acquisition, and we are truly operating as One Takeda, with 50,000 employees working together to execute on our strategic priorities.”
Mr Saroukos highlighted the importance of integrating the two companies to create a one Takeda culture. “We have quickly come together under the Takeda value system and the company’s 238-year history. It’s very important that we put the patient at the centre; build trust with society; reinforce the reputation of the company; and deliver superior business performance, in that order. This is done at all levels of the organisation, but it starts with leadership directly engaging with employees and earning their trust.
“We have committed to being transparent and upfront about our core and non-core business,” said Mr Saroukos.
He continued, “So far, we have announced plans for divesting US$10 billion of non-core assets. We have achieved approximately 55 per cent of that and negotiations are ongoing for further potential divestments.”
The divestments to date have been highlighted by the US$5.3 billion sale of eye therapy XIIDRA (lifitegrast) to Novartis.
“We have three key financial criteria for our strategy. We remain focused on achieving annual recurring cost synergies of US$2 billion by the end of FY2021, to meet our mid-term target of 'mid-30s' Underlying Core Operating Profit Margin.
"On divestitures, we continue to pursue opportunities to divest US$10 billion of non-core assets, to accelerate deleveraging and focus on our 5 key business areas. And we’re showcasing that we're delivering on, and exceeding our commitments.
“The business is tracking better every quarter and we have increased our guidance for the third time this fiscal year, because of business momentum and accelerated synergies. Now it is a matter of how we continue to not lose sight of that, to stay focused, but really drive best in class new product launches that will make a critical difference for patients.
“Investors are also very interested to know about our expected top-line growth and how the pipeline is going to support that. We now have 14 global brands, which is far more diversified post-acquisition, and their sales have grown at 20 per cent year-to-date. This growth is going to offset the revenue impact of patent losses between now and the middle of the decade.”
Mr Saroukos said the acquisition has made Australia an even more important market for the company. “The business is growing at an impressive rate. I think there are a lot of opportunities with future product launches – eight in the coming years – and that is very exciting.”
He added, "For 2020, we want to still be in a position where the integration is seen as a success, internally and externally. This means we are developing our pipeline to provide transformative or curative potential for targeted populations with high unmet need, delivering on our plans and our financial commitments, and building the new Takeda that will take us to the next 238 years.”